What happens when the disrupters get disrupted?
Ok, so this is what happens when I have eight hours on a plane with Harvard Business Review. I get a little academic on you.
Harvard Business Review’s October edition published two back-to-back pieces, Rethinking of the Decision Factory (Rodger Martin) and Consulting on the Cusp of Disruption (Christensen, Wang and van Bever) that a) made me want to jump up and down with my hand in the air and b) made me think the authors of these two articles should talk to each other. The conclusions-- that companies would be wise to reorganize “knowledge workers” around projects rather than jobs, and that professional firm democratization is upending the consulting industry – are not unrelated.
The most important, and indeed the truly unique, contribution of management in the 20th Century was the fifty-fold increase in the productivity of the manual worker in manufacturing. The most important contribution management needs to make in the 21st Century is similarly to increase the productivity of knowledge work and the knowledge worker. Peter Drucker
Martin outlines a clear problem-solution. Problem: Companies fight to find knowledge and retain knowledge workers, accumulate them, assign them jobs, then lay them off when they realize they are expensive not optimally productive; only to repeat the cycle when revenues go back up. Solution: Break the binge and purge by organizing around projects not jobs, recognizing talent as nimble experts that can flow to projects when their capabilities are needed. He cites professional service firms as evidence of this solution, asserting their growth is related to their flexibility to assemble around projects rather than permanent jobs.
What’s crazy is that that in he very next HBR piece, Christensen, Wang and van Bever argue that “the agility of the established consulting firms is being challenged by an even more decentralized marketplace, one that allows clients to more cost-effectively customize services to tackle projects when needed.” [Commercial break: note that one of the authors is disruption guru Clayton Christensen who has a pretty impressive fan base, including me, and if you have not read his book How Will You Measure Your Life, go on line RIGHT NOW and buy it.] The authors note that cost pressures have “stirred the C-Suite from their sleepwalking with big-name consultancies; raising consciousness that price is not always a proxy for quality.” As clients become more cost aware and savvy about the jobs they need done, they are starting to move away from big box and toward “modular providers.” The shift is generally triggered when customers realize they are paying too much for features they don’t value and that they want greater speed, responsiveness and control.”
In other words, the most successful models of knowledge worker utilization are themselves becoming “decision factories” on the cusp of disruption.
* with permission from consultantsmind.com
Maybe the big dogs see it as a cusp, but the rest of us know it is already here. I’ve gotten used to the cockeyed looks when explaining Ideaction Corps business model to prospective clients. Ideaction is a collaborative of contracted talent –agencies and freelancers – and we build custom fantasy teams of professional services for each client project. In other words, we’re making it easy for clients to customize modulated services to tackle projects when needed.
Ideaction’s promise to our clients is that we offer the highest caliber of talent, innovation, and cost-effectiveness. We started with the proposition that we can be both more creative and nimble and offer our services at a lower rate of our competitors because we organize around projects and campaigns and do not carry ongoing fixed costs of real estate, unstaffed time and training. Add a dose of we actually care about what you are doing, i.e., passion, and the result is that work is both stellar and fun.
There are similar models springing up, for example the Boulder, Colorado-based creative ad agency Victors & Spoils. “All of the best talent in the industry is freelancing for us,” Says Victors & Spoils CEO John Winsor in a recent post “To me, that’s a radical paradigm shift.”
Christensen et al cite research documenting aggressive turnover in prestigious consulting firms, now averaging 18% a year. “McKinsey alone has 27,000 alumni today, up from 21,000 in 2007; the alumni of the Big Three combined are approaching 50,000.” And where is the talent going? – To the smaller, more nimble models such as Austin, Texas based Maven Associates- whose consultants are entirely freelance alumni from Bain, BCG or McKinsey.
Bottom line: things they are a changing in the management-consulting-creative services world. I predict the curious reactions to Ideaction business model are not long for this world, and I for one found these pieces in HBR to be a relief, and kind of a rhetorical question.